TELF AG Market Roundup 2024 Week 14
European Gas Futures and Freight Rates
European gas futures surged by 5% to nearly €29/MWh, reaching a two-month high amidst mounting concerns over geopolitical tensions. The surge in oil prices to six-month peaks further contributed to market unease, reflecting heightened worries about Middle Eastern tensions.
In the realm of freight, Drewry’s World Container Index experienced a 1% decrease this week, settling at $2,795 per 40ft container. Despite this decline, the index remains substantially higher than the same period last year, marking a 64% increase. Fluctuations were observed across various routes, with rates from Shanghai to New York experiencing a 4% decrease, while rates from Shanghai to Los Angeles declined by 2%. Despite these fluctuations, stability was observed in certain routes, with rates from Shanghai to Genoa and New York to Rotterdam remaining unchanged.
Chrome Ore, Ferrochrome, and Stainless Steel
Fastmarkets’ update on chrome ore and ferrochrome highlighted steady prices for UG2/MG chrome ore, with transactions remaining robust despite a slight decline in chrome transaction volumes. Domestic stainless-steel prices, however, experienced a decline amidst concerns over oversupply, contrasting with stable Turkish lumpy chrome ore prices ahead of the Eid al-Fitr holiday.
The FerroAlloyNet Forum in Kunming shed light on the dominance of chrome costs in industry discussions. South African chrome ore prices rebounded in 2024, following a dip in late 2023, driven by decreased production and rising electricity costs. This rebound has translated into increased FeCr production costs in China, with major producers like Tsingshan raising tender prices. However, skepticism persists regarding sustained higher tender prices, contingent upon stainless steel sales strength.
Meanwhile, developments in special steel demand and production in Japan paint a mixed picture. Efforts to address semiconductor shortages and the resumption of some passenger car engine production show promise, while weak demand in housing and reduced stainless steel production pose challenges.
Battery Materials and Lithium Market Dynamics
In the battery materials sector, cobalt sulphate prices remained steady within a specific range, reflecting a quiet domestic market with limited transactions. Market participants anticipate steady supply growth, holding a bearish long-term view on pricing. On the lithium front, challenges loom over the future of the North American Lithium (NAL) project in Canada, despite owners’ confidence in mitigating risks associated with low lithium pricing. Operational reviews and cost optimization efforts are underway to navigate the current low-price environment and high production costs.
